The Maharashtra government fears it will have a revenue deficit in the budget this year due to drought and the overall slowdown in the market. The state had '12,000-crore revenue deficits last year also. Uncertainty over the approval of Goods and Services Tax (GST) in Parliament has put the state in a fix and it is finding it tough to recover losses of about Rs 5,000 crore.
The BJP-led government is going to present its second budget on March 18 hoping to get some relief from the Centre’s budget. But already reeling under debt of Rs 3 lakh crore, the state is battling to make ends meet. The state has not given any thought about reducing the interest of Rs 20,000 crore on the debt per year. “We have not crossed our debt limit. So, it is okay to go for more borrowing for welfare schemes. We hope the GST bill passes in Parliament, else we have to continue with the existing system,” finance minister Sudhir Mungantiwar said.
However, officials from the finance department admitted, on condition of anonymity, that the government might have revenue deficits this year too. “Last year, we had revenue deficits of Rs 12,000 crore. We will might have to show a zero-deficit budget which is a practice in prudent accounting. But we worry about the heavy debt the state has borrowed so far. Also, much of the funds are given for drought relief and waiving of Local Body Tax (LBT). We’ve also had to make a financial cut of Rs 15,000 crore to welfare schemes after the Centre reduced its share,” an official from the finance department said.
Maharashtra had abolished LBT assuming that the Centre would bring the GST. The state government has already taken a burden of Rs 4,210 crore for a period of seven months from August 2015 to March 2016 as grants to the local bodies for abolishing LBT. But even if the GST is approved, it needs to be accepted by at least 15 states before implementation, which is also a tough task for the Centre, the official pointed out.
